JOHANNESBURG (miningweekly) – Toronto- and Johannesburg-listed Rockwell Diamonds continues to post impressive production and sales figures, as the Middle Orange river- (MOR-) focused diamond miner nears its objectives of lifting mining and processing capacity to 500 000 m³/m of quality cubes and increasing the recovery of large diamonds.

The company increased average stone size recovered at its own operations in the MOR by 139% to 4.6 ct for the quarter ended February 28, from 2 ct in the prior year, as it continued to benefit from the growth strategy of its three mines that were now in production in the region.

Volume production from Rockwell's three MOR mines, forming the cornerstone of Rockwell's organic growth strategy, increased by 60% and carat production rose by 39%, as the Saxendrift Hill Complex (SHC), in the Northern Cape, operated at its nameplate capacity throughout the quarter and volumes processed at Niewejaarskraal, also in the Northern Cape, gained momentum, approaching nameplate capacity of 100 000 m³/m at quarter-end.

CEO James Campbell outlined in a statement on Tuesday that total carat production for the three months grew 74%, made up of 2 676 ct from own operations and 4 041 ct from contractors.

Rockwell reported a 45% increase in fourth-quarter volumes of gravel processed to 897 288 m³, of which 615 510 m³ was mined from its MOR operations and the balance from its five royalty mining contractors operating at Tirisano, in the North West.

Meanwhile, the miner’s MOR operations achieved a 76% increase in carat sales while the average carat value rose 14% to $1 978/ct.

The value of sales from the region also increased 101% to $8.5-million, while the value of sales from Tirisano mining contractors generated $3.6-million, of which 12.5%, or $452 270, accrued to Rockwell.

Overall revenues from diamond sales  – excluding beneficiation – increased by 69% to $12.1-million in the fourth quarter of fiscal 2014.
Total carat sales from the company’s properties for the quarter were up 81% to 9 596 ct, sold at an average price of $1 264/ct, which was a 7% drop compared with a year ago.

Rockwell also announced on Tuesday that a 109 ct vivid yellow diamond had been polished from a 169 ct rough stone that had been recovered in September 2013 at the SHC mine.

The cushion cut diamond was sold through Rockwell's beneficiation partnership with diamond cutters Diacore and the company's profit share would be recognised as beneficiation revenue in the first quarter of fiscal 2015.

SAXENDRIFT

At the Saxendrift mine, quarterly volumes of gravel processed were down 29% year-on-year to 273 418 m³, comprising entirely of gravels from the higher-grade Saxendrift extension.

The drop was owing to the combined impact of longer haulage distances as well as earthmoving vehicle availability as a result of the ageing equipment fleet at Saxendrift.

“These are now being proactively addressed through the fleet optimisation programme that is in the implementation phase. Service delivery protests in the nearby town of Douglas also impacted volumes in the fourth quarter,” noted Campbell.

The mine achieved a 16% increase in average grade to 0.58 ct/100 m³; however, this was not sufficient to offset the lower volumes and, as a result, carats produced declined 17% from the prior year to 1 594 ct.

Carats sold from the Saxendrift operation increased by 13% to 2 764 ct at an average price of $2 185 – 26% higher than in the prior comparable period.

“Accordingly, the mine produced a 42% increase in revenue from diamond sales to $6-million,” Campbell said.

Notable stones recovered at the Saxendrift mine processing plant included 29 rough diamonds exceeding 10 ct, including, most notably, a 64.72 ct and a 67.12 ct stone.

SAXENDRFIT HILL COMPLEX

The SHC mine achieved quarterly volumes of gravel processed amounting to 179 479 m³, from which a total of 681 ct were recovered during the quarter.

Sales from SHC amounted to 1 154 ct at an average price of $1 722/ct, generating revenue from diamond sales for the period of $2-million.

Notable stones recovered at SHC during the fourth quarter included six rough diamonds exceeding 10 ct, including, most notably, a 50.96 ct rough stone.

NIEWEJAARSKRAAL

Up to 100 000 m³/m of gravel was processed at the Niewejaarskraal mine towards the end of the fourth quarter and included the second phase of the processing plant, comprising the installation of an in-field screen (IFS) and a rental bulk X-ray system.

The total volume of gravel processed in the fourth quarter amounted to 162 613 m³.

Meanwhile, after a detailed review of the existing geological data, mining started in mid-February according to the new 18-month mine plan.

“Two mining faces have been opened up adjacent to the IFS and these should enable higher productivity and provide optionality in the mine plan. Early indications are that the grade is now approaching budget,” said Campbell, adding that the mine produced 401 ct during the fourth quarter.

Sales from Niewejaarskraal amounted to 385 ct, with total revenue of $482 976 generated at an average price of $1 254/ct.

“The company remains confident that carat values will continue to improve and reflect the higher carat values that characterise the MOR once the [Niewejaarskraal] mine is consistently running at nameplate capacity,” Rockwell said in a statement.

Notable stones recovered at Niewejaarskraal during the fourth quarter included over ten 10 ct rough diamonds.

ROYALTY MINING CONTRACTORS

The royalty mining contractors operating on the Tirisano property continued to perform “consistently” in the fourth quarter, with total volumes of gravel processed amounting to 281 778 m³, yielding 4 041 ct.

Total revenue generated by the contractors from diamond sales amounted to $3.6-million from the sale of 5 293 ct at an average price of $695/ct.

The royalty mining contractor agreement at Kwartelspan, which started in the fourth quarter of fiscal 2014, was in the process of being converted into a joint venture mining arrangement.

MIDDLE ORANGE RIVER FOCUS

Commenting on the fourth-quarter performance, Campbell said the performance demonstrated progress on a “number of fronts” and was aligned with the group’s strategy to focus on the MOR.

MOR volumes of gravel processed were up 60% from a year ago on the back of additional throughput from new capacity, in spite of abnormally heavy rainfall as well as service delivery protests.

“This delivered a 39% increase in carat production with the value per carat up 14%. We now have three mines in production in the MOR, all of which have multiple mining faces. This has provided us with benefits from production diversification as well as mining flexibility.

“During the quarter we continued to focus on the fleet optimisation programme to renew our aging fleet, cost effectively. We are currently reviewing the various financing options that have been presented to the company and have started the implementation phase,” Campbell noted.

Further, the consistency of results from the royalty mining contractor agreements at Tirisano was now enabling Rockwell to take a measured approach to assessing the future options of some of its remaining noncore assets.